With a market capitalization of ₹ 11,866 crores, Finolex Cables is a small-cap company engaged in the manufacturing of electrical and telecommunication cables in India. It has been in existence for more than 50 years and has forayed into the manufacturing of Fast-Moving Electrical Goods (FMEG) and home appliances segment.
The shares of Finolex cables have been on an uptrend for the past month. They gained 9.24% on Monday to reach a multi-decadal (30 Year) high of ₹ 847.50 apiece on the exchanges. Its shares were trading at ₹ 816.50, up 5.24% at 12:44 PM on Monday. More than 37.51 lakh shares changed hands on the bourses, which was more than double, compared to its two-week average volume of 66,000 shares.
According to reports, the company’s shares have seen buying interest from high-net-worth individuals (HNIs). Its share price has beaten the targets given by analysts.
Result
Finolex Cables posted a net profit after tax of ₹ 135 crores in the October to December quarter, indicating a 42% growth year-on-year. It reported a revenue of ₹ 1,150 crores during the same period, indicating an increase of 18%.
It said that the distribution push is beginning to contribute to revenue share improvement. Most product lines showed volume expansion in the communication cables segment and the volume of metal-based products improved by 27 per cent during the quarter and optic fiber cable volume grew by over 70 per cent.
Multibagger
Notably, the stock rallied 54.81% in the past month. In fact, it has given multibagger returns of 123.94% in the past year as its share price rallied from ₹ 378.45 apiece. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.23 lakhs today!
Is there more steam left?
The company said that the union budget directly benefits various segments of the company. It expects that more development will be seen across the country with a planned capital expenditure of Rs 10 trillion, a YoY increase of 33 per cent, attracting more investors.
Fineolex added that this would in turn improve the cash liquidity in the market, benefiting the real estate sector. These changes would therefore drive improvement in infrastructure housing, smart city projects, metros & telecommunication sector (5G). Thus it believes that it is a great opportunity for the company to grow the demand of various cables and other products.
Written by Simran Bafna
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